This is what YC has come to? Funding pay-to-be-discovered scams? Because whichever way you slice it, this is pay to play. Sad.
I agree pay-to-play can be sketchy, but the alternative (which I do all the time) is put my music out there for free to writer's overcrowded inboxes and hope that they take a look (which they often do not).
I put in $20 just to give it a shot. If nothing happens, no big deal.
For a lot of real artists $20 is a BIG deal, thats dinner for the band or gas to the next gig, any real artist would never agree to this, by charging $20 your only going to get desperate bands that everyone else ignores because they suck. It takes a minute to listen to someones mp3, your kidding yourself thinking charging is going to give you better overall quality.
The payment is just acting as a low level barrier for initial contact.